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Building a Fat SaaS Venture: Rob Hull, Founder and President of Adaptive Insights (Part 6)

Posted on Monday, May 5th 2014

Sramana: One of the things I like is that the type of software you are selling has a lot of exit barriers.

Rob Hull: The important things to take away as an entrepreneur is that our product is sticky. Our software becomes an integral part of a business’s ongoing monthly process. We are a part of the closing process and have consolidation capabilities for financial statements. We can quickly tell CFOs what has happened versus what was expected. We can also look out at what has happened today and tell them how we think that will change things tomorrow and in the future.

Another thing that makes us very sticky is that our software is likely to be integrated into any number of other transactional information systems. The most common integration is with ERP and general ledger. Getting good financial data out of those systems lets companies report on that data and build good score cards. In addition to that financial data, we can sit on top of any number of operation systems such as marketing or sales system. Connections into a or an Eloqua, Marketo or Workday allow our customers to bring data together in one place that is then synthesized rationally. That gives them a very holistic view of their past, present, and future business.

Sramana: Can you give us a summary of your financing strategy?

Rob Hull: I like to think of this as two stages. The first stage was a very capital-efficient company building phase where we had to build the technology, prove the market existing, validate the business model, and prove that customer demand was there.

The first $35 million of financing took us through that phase. We proved that there was a market, that our product worked well, and we were able to obtain great customer references. We were able to show that the market was very large. We proved that we could succeed from a business model perspective. In the 2008 and 2009 downturn, we shifted our focus to make sure that we were a cash flow positive business.

Sramana: You said that you used the first $35 million to achieve the goals of phase 1. What revenue run rate were you able to get to with $35 million?

Rob Hull: I don’t remember exactly what the revenue was, but we also don’t talk specifically about revenue details. I can tell you that in 2012, we were able to raise the capital we needed to reinvest in growth. We were able to reinvest the money in the business to capitalize on our market leading position and take advantage of this very large market opportunity. That is what we have used the last $65 million for. We are using that money to accelerate growth.

This segment is part 6 in the series : Building a Fat SaaS Venture: Rob Hull, Founder and President of Adaptive Insights
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